PACRA assigns rating to Maple Leaf, Pakistan

PACRA assigns rating to Maple Leaf, Pakistan
Published: 15 July 2010

The Pakistan Credit Rating Agency (PACRA) has assigned Maple Leaf Cement Factory Limited (MLCFL) the long-term and short-term entity ratings of “BB” (Double BB) and “B” (B) respectively here on Wednesday. Meanwhile, the Sukuk issue of PKR8,000m has been assigned a rating of “BB+” (BB Plus).
 
These ratings denote that there is a possibility of credit risk developing, particularly as a result of adverse economic change over time. MLCFL’s ratings reflect high business risk of the company emanating from challenging industry dynamics, further accentuated by emerging capacity overhang in the sector.
 
The financial profile of the company remains under pressure due to highly leveraged capital structure and distressed cash flows. Though recently concluded debt restructuring would provide a short-term relief.